Defining "facts and circumstances"

UMG Recordings, Inc. et al. v. Veoh Networks is the first decision to come out of a federal circuit court on the subject of 512(c) safe harbor protection for user-generated video sites, but it shouldn’t be long before there’s another. Viacom v. YouTube is currently on appeal to the 2nd Circuit. Media conglomerate Viacom accused YouTube, a popular online video service, of deliberately violating copyrights by allowing users to post clips from its movies and television shows, and the district court granted summary judgment in YouTube’s favor, saying it qualified for 512(c) protection. After hearing arguments in October 2011, the 2nd Circuit asked both sides for further clarification on whether YouTube’s syndication of third-party videos falls outside the safe harbor and whether YouTube had knowledge of “facts and circumstances from which infringing activity is apparent.”

While UMG is likely to influence the 2nd Circuit’s decision, Cullen Pendleton, a partner at Marshall, Gerstein & Borun, presents an alternate scenario: “You’d say that companies such as YouTube have to know of facts or circumstances from which infringing activity is apparent because everybody who uses YouTube knows that infringement is taking place.”

Neither the district court in Viacom nor the 9th Circuit in UMG found such arguments persuasive, saying that a generalized knowledge of infringement isn’t enough to disqualify a service provider from safe harbor protection. However, Pendleton says, if the 2nd Circuit disagrees, creating a circuit split, “the Supreme Court is very likely to want to take up and resolve [that].”